GE Foundation President Deborah Elam speaks during the 16th Annual Red Cross Heroes Breakfast at the Stamford Marriott Hotel and Spa in Stamford, Conn., Jan. 30, 2015. In 2013, the GE Foundation issued grants and matching gifts totaling more than $100 million, to local and international organizations alike. less

General Electric CEO Jeff Immelt accompanies President Barack Obama on a January 2011 tour of a GE plant in Schenectady, N.Y. Obama appointed Immelt to chair a White House council on jobs and competitiveness that year. less

General Electric CEO Jeff Immelt accompanies President Barack Obama on a January 2011 tour of a GE plant in Schenectady, N.Y. Obama appointed Immelt to chair a White House council on jobs and competitiveness ... more

Photo: J. Scott Applewhite, ST

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In April 2011, protestors march to General Electric's corporate headquarters on Easton Turnpike to protest corporate tax breaks.

In April 2011, protestors march to General Electric's corporate headquarters on Easton Turnpike to protest corporate tax breaks.

In this file photo provided by General Electric, GE CEO and Chairman Jeff Immelt stands in front of a jet engine.

In this file photo provided by General Electric, GE CEO and Chairman Jeff Immelt stands in front of a jet engine.

Photo: Uncredited, Associated Press

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GE's 40-year impact as a corporate entity in Connecticut

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A decade back, attorneys from the town of Fairfield and General Electric met in court to determine the value of the company, at least as measured by the worth of its headquarters property at 3135 Easton Turnpike. A judge ruled that the town erred in calculating its formula for arriving at its figure.

With GE CEO Jeff Immelt announcing last week a search for a potential new headquarters outside of Connecticut, representatives from Fairfield to Hartford are now working out their own calculus on the value Connecticut reaps from the behemoth's presence.

Employment, tax contributions, philanthropy, real estate, reputation -- all are slotted key points on the slide rule of economic development, in differing order depending on a particular vantage point.

"The mere presence of a corporate entity with the stature, world markets penetration, success story and history such as GE says a great deal about the place in which such an entity is located," said Paul Timpanelli, CEO of the Bridgeport Regional Business Council. "To have such a company even consider leaving Connecticut, because Connecticut is no longer a place that encourages and supports business, is a very bad sign for the future economic growth of our state."

Over the decades, GE has successfully kept its toehold near the top of the Fortune 500 -- this past week it was ranked eighth on the 2015 installment of the list --in part through its willingness to drop lesser-performing business units and put that cash into faster-growth areas.

During Immelt's tenure, GE has jettisoned the legacy GE Plastics division, where he and so many senior leaders received management training; NBCUniversal, which gave GE a highly visible platform for promoting its brand; GE Appliances, which is being acquired by Electrolux; and, most recently, GE Capital, with GE in the midst of selling the Norwalk-based financial services giant piecemeal to the highest bidders.

Soaring profits

Immelt, who lives in New Canaan, has been restoring GE closer to its profile when former CEO and Greenwich resident Reginald Jones moved GE's headquarters to Fairfield in October 1974, with the company fresh off the introduction of a new jet engine that was a direct outgrowth of its formidable base in industrial research.

From GE headquarters in Connecticut, Jones' handpicked successor Jack Welch Jr. would perfect the model of the modern corporation, relentlessly carving out business efficiencies, reallocating capital to growth sectors (including the lending of its capital to others) and seizing any advantage GE could get from its size and global footprint.

From 1974, when GE was the 11th most profitable company on the Fortune 500, by 2000 GE led the list with profits of $10.7 billion. Welch would land Fortune and Time magazine accolades as manager of the 20th century.

Welch accomplished the feat on the back of GE Capital, which generated $66.2 billion in revenue in 2000, just over half of GE's total revenue for the year and twice the percentage GE Capital produced in 1989 about midway through Welch's years as CEO. With the collapse of the financial markets in 2008 and the intensified financial scrutiny brought about by the Dodd--Frank Wall Street Reform and Consumer Protection Act of 2010, the massive financial arm became a liability.

Conglomerate as banker

Last month, the CEO of middle-market lender Golub Capital gave investment analysts his own succinct take on GE Capital's arc.

"GE got its start in GE Capital by using its very low cost of capital to make loans that banks generally didn't want to make -- good loans, smart loans, but loans that didn't fit most banks lending templates," said David Golub, CEO of Golub Capital. "The unit grew rapidly under Welch and under Immelt until the financial crisis -- and then the unimaginable happened. AAA-rated GE found it terribly difficult to roll its commercial paper. ... In an era of increased regulatory scrutiny, it became very tough to run a bank that focused on making loans that banks don't generally make."

Immelt weighed in as recently as last week on the decision to divest GE Capital in a video posted by Fortune.

"There just weren't a lot of people that predicted exactly what would end up happening in 2008 and 2009 -- and you know, we weathered it, right?" Immelt said. "It wasn't that where we ended up was a lot different than the general direction we've been going, more or less, for the last decade. ... We were 50-50 industrial-financial when I became CEO. That wasn't where I wanted the company to be. It just could have moved faster."

From ABC to UConn and beyond

Things are moving fast now -- lower Fairfield County has been on tenterhooks since mid-February, when GE announced its intention to sell off most of GE Capital, which has its own large headquarters office in Norwalk and four big satellite buildings in Stamford. As of Friday, the GE Capital auction was ongoing, with Blackstone Group purchasing much of GE Capital Real Estate and Wells Fargo a rumored bidder for GE Capital's mammoth commercial lending group.

Last week, GE gave Connecticut notice it can no longer take its headquarters presence for granted, either, sparking responses from legislative leaders who said the taxes GE pays are unreflective of the company's actual operations in Connecticut.

Regardless of GE's corporate tax burden, however, GE employees pay Connecticut income taxes, not to mention spending money in stores, restaurants and other pillars of their town economies.

With salaries starting at $75,000 for financial analysts, as reported anonymously to Glassdoor.com, and going up from there -- as high as $37 million for Immelt's own 2014 compensation -- GE's annual payroll in Connecticut could be well in excess of $500 million.

Corporate citizen

GE also operates one of the largest philanthropies based in Connecticut in its GE Foundation in Fairfield, which disbursed $106 million in direct grants or matching gifts throughout the U.S. in 2013.

Sacred Heart may have received the most lasting gift of all as a result of GE's history in Fairfield, with a Welch gift endowing the John F. Welch College of Business.

"For decades, General Electric has distinguished itself as a good corporate citizen in Connecticut on many levels," Sacred Heart President John Petillo said in an email. "Beyond being an exceptional community partner, the prestigious brand presence that GE brings to the town of Fairfield makes it an inviting place for families to live and for students to come and study," Petillo added. "Our students benefit from GE professionals who donate time in the classroom, from internships while they are studying and jobs after they graduate."

If the GE Foundation's grant-making arm gets the headlines with its ability to disburse funds in the millions, its gift-matching program is far more pervasive. Its 2013 annual report runs 470 pages thanks to thousands of matching gifts it disbursed that year, to all manner of organizations from ABC of New Canaan to the University of Connecticut, which received matched $83,000 in donations that year with equivalent contributions from the GE Foundation.

Those gifts are often the result of the connections GE employees foster with various causes that touch their personal lives.

"I think any time they make a change or reduce their presence in Fairfield County, the county is going to feel it," said Juanita James, CEO of the Fairfield County Community Foundation in Norwalk. "From an employee volunteer contribution ... that is as big a blow, if not a bigger one, than nonprofit financial support."

A place in his heart

For now, the people of GE and GE Capital are left wondering whether they will be living in Fairfield County a year from now. Jeff Mayer, a Westport resident who is CEO of Solomon Energy and who previously led MxEnergy in Stamford, noted the difficulties for CEOs in weighing the bottom line against the potential disruption for the personal lives of employees.

"I always believed in full transparency, and I felt it was important I never wanted to be in a situation where someone gave up a job opportunity or a chance for advancement because they were relying on false assumptions," Mayer said. "I think it's wise of executives to do that, although it's very disruptive and it creates a lot of anxiety."

If some old-timers still associate GE with New York, where it long had its headquarters in Manhattan and where it has its GE Global Research Center outside Albany, many more associate the company with its adopted home of Connecticut, whether by virtue of driving by its modern offices each day or in the memory of bygone plants like the sprawling factory GE ran for decades on Bridgeport's East Side, which was dismantled to make way for new development.

The Bridgeport Regional Business Council's Timpanelli recalls a talk he had with Immelt at his group's annual meeting several years ago.

"We had a brief conversation about his tenure when he started at GE in the Bridgeport plant," Timpanelli recalled. "He grew to have a place in his heart for Bridgeport. That conversation ultimately led to GE investing $25 million ... for Bridgeport-specific, housing-related projects."